How Much Money Can You Earn in Forex?

The reality is cruel …

Hello dear readers! Many beginner Singapore Forex traders ask “How much can you earn on Forex?” Today, I am going to reveal you the reality of the Forex profits and how much money people make with online trading. I will show real examples made on real Forex accounts.

In order to understand the issue properly, let’s define what is profit and how much is really possible to make money on Forex. Profit depends on the effectiveness of your trading, that is the interest that a trader earns on his/her investment. But there is a second part of it, that is money itself. 50% of the profits from the $100 investment is only $50, and from $1,000,000 is $500,000! Is there any difference? Yes there is and it is very significant. Let’s look at two components of Forex earnings and profits and find an answer to this question.

What percentage can you really make on Forex?

Theoretically, this value is not limited, it is possible to make hundreds and even thousands of percent per year. To be more precise, let’s look on how much earning professional Forex trading a making. Hedge Funds are the leaders in financial markets and their earnings achieve about 15-20% profit annually for all funds. If we take the best of them, so we can estimate the annual earnings of 30 – 40% on their investments. And if you calculate this amount before payment of the fees and commissions, so it may easily reach the ROI of 50-60% a year. In one of my favorite books about stock trading I read that the average annual ROI of the biggest investors in the market is from 20 to 70%. These are real numbers for those people who control huge capitals, and have lots of experience and professional skills.

But the average capital of a private Forex trader is much smaller and he is usually using a larger leverage. But it does not change the situation radically, the average annual ROI of an experienced Singapore Forex trader with a reasonable risk is somewhere about 20-100%. These are the real numbers, and as I know how Forex trading really works I can definitely say that it is not possible to earn 1000% per year.

You can argue that these earning examples are not coming from Forex, but the principles of earnings are not different in stocks, Forex and futures as the average earnings there are approximately the same. 100% profit on average a year is a great result!

Consider the second component – the money.

As shown in the example at the beginning, money is very important. The majority of traders who trade on the Forex Market have only a few hundred dollars in the account. It is not difficult to calculate that being able to trade well, in a year you will get the same few hundred dollars, it’s just not serious. I believe that by saying this I have destroyed the dream of most traders who are reading this article, but let’s not get too dramatic. Forex trading is a serious business, and if you think that by investing $100 you can make a million in a couple of months, you are full and you won’t see any results.

If you earn 100% per year from your currency trading activity, then in order to make a monthly profit of $1000, you must have a trading account of $12 000. Keep in mind that it is almost impossible to make your profits consistent. 100% is an average earning per year. For example, when check my yearly earning records, I notice that one year I made almost 200%, the next year it was about 35% profit, etc. Your earnings from Forex trading depend on lots of things and one of those things is your experience, trading strategy and capital. In order to make good profits in Fx trading you need to invest a lot of money or find investors who will trade for you.

Those traders who make 100% average per year treat Forex trading as a job or business. But the majority of traders are not interested to take it seriously! Everyone wants to make easy money without much work. As a rule many traders start learning about money management only after they have lost their money. As I mentioned before, theoretically, you can earn a thousand percent profit, but it is not about serious and stable business, such high profits can make traders who gamble in the Forex market. Although luck doesn’t happen often, but impressive examples are still there!

One of the most outstanding cases I have ever saw is when a trader made more than 100 000% in a few months! Your eyes do not deceive you, and he did it in a public competition. But you need to understand that luck is not great, as it does not happen often, and sooner or later ends. For me, the main thing is to have relatively stable earnings, but everyone makes his own choice.

Some time ago a young woman came to me for consultation. She had an interest in the financial markets, and even took some training courses. She asked me how much you can earn on Forex and about the literature that is worth reading on the subject of Foreign exchange. Of course I recommended her few books! But when she learned about the real earnings, and the examples I gave her, then she lost the whole interest in the subject. To be honest it is very sad for me that such an interesting area of activity is associated with easy money, and only few people have serious interest in it.